AdvanSix (ASIX) PT Raised to $40 at Stifel on Record Acetone Price Levels
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Stifel analyst Vincent Anderson raised the price target on AdvanSix (NYSE: ASIX) to $40.00 (from $35.00) after updating estimates post-1Q21 to account for the rapid shifts in key product markets, while also adjusting for significant progress in commercializing specialty derivatives.
The analyst stated "Acetone has helped lead the recovery, setting record price levels in 1Q21. While not be counted on for the balance of the year, the spike speaks to the fundamentally improved supply/demand balance in the US following trade case wins in late 2019. As acetone likely recedes, nylon/capro demand should continue to see improved demand, supporting incremental spread expansion (though we remain conservative here in our numbers until proven out). Perhaps most importantly, incremental data from AdvanSix implied upwards of $25 mn of 2021 EBITDA contribution from specialty products that were, until only recently, a benign footnote to revenue commentary. The cyclical recovery on top of improving cash generation keeps us positive on shares. We maintain our Buy rating and raise our target to $40."
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